Saudi Arabia has been able to sustain high economic growth rates over the past decade, which contributed to an unprecedented increase in demand for energy

ENERGY efficiency and diversity of fuel mix are rational choices; and there are countless examples and good practices that can be found around the globe, says Khalid Al Falih, president and chief executive officer of Saudi Aramco.

He was speaking ahead of the World Economic Forum in Davos, Switzerland.

With that in mind, efficiency and diversity become key aspects of energy policy in many countries around the world, irrespective of their resource endowment, he noted.

“Looking at Norway as an example of a major oil and gas producer – the third largest exporter of energy after Russia and Saudi Arabia – the country has actively promoted investment in renewable energy and energy efficiency through a dedicated government agency,” Al Falih said.

“Similarly in Australia, another resource-rich country endowed with coal and natural gas, support for the development of renewables and energy efficiency has been enhanced through mandatory renewables targets, feed-in tariffs and energy efficiency regulations.

“Looking closer to home in the Arabian Gulf region, the UAE imposed a mandatory rating system for construction of energy efficient buildings in Abu Dhabi, and created a free zone dedicated to the development of green technologies and energy conservation in Dubai,” he added.

“Like those examples, and many more, Saudi Arabia recognises the importance of energy efficiency and ensuring a sustainable and diversified energy mix.

“This becomes of higher importance to us with the high pace of growth we are experiencing.

“Saudi Arabia has been able to sustain high economic growth rates over the past decade, which contributed to an unprecedented increase in demand for energy,” Al Falih highlighted.

Saudi Arabia registered higher economic growth in 2011 and 2012 than any other member of the G20 with the exception of China.

Robust growth is forecast to continue as the country pursues an ambitious agenda of raising living standards for its citizens, diversifying the economic base, creating sustainable jobs and enhancing the competitiveness of the economy while sustaining our natural resources.

However, diversifying our economic base from a dependence on crude oil exports should not be construed as turning away from leveraging the Kingdom’s “energy advantage”, Al Falih pointed out.

“In fact, manufacturing investments that add value and create jobs will continue to be a main pillar in the Kingdom’s economic development,” he said.

Delivering safe, secure and environmentally sustainable energy to foster this growth is of paramount importance.

Saudi Arabia is pursuing a diverse set of demand-side and supply-side options to meet this challenge.

On the demand side, a Saudi Energy Efficiency Center (SEEC) was established to roll out energy efficiency measures in industry, transport and buildings.

In particular, SEEC has already established minimum standards for air conditioning units in a bid to reduce the growth of peak energy demand.

On the supply side, the National Power and Water efficiency programme is driving efficiency improvements in existing plants and developing a long-term plan based on an optimum fuel mix consisting of conventional natural gas, liquid hydrocarbons and renewables.

Currently, natural gas accounts for almost 50 per cent of power generation, which is higher than figures observed in developed nations such as the UK and the US.

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